Dear All,
Need your valuable insights. Can we reduce or hold the 'Monthly Salary' of any particular employee for not achieving goals/targets, KRA's, or partially completed KRA's? If yes, what would be a legal process or to be compliant. If not, what would be the alternatives so that employees may take their R&R seriously.
Thanks in anticipation.
From India, Pune
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11Need your valuable insights. Can we reduce or hold the 'Monthly Salary' of any particular employee for not achieving goals/targets, KRA's, or partially completed KRA's? If yes, what would be a legal process or to be compliant. If not, what would be the alternatives so that employees may take their R&R seriously.
Thanks in anticipation.
From India, Pune
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Legal Aspects of Reducing or Holding Monthly Salary for Goal Non-Achievement
In India, labor laws strictly regulate the reduction or holding of an employee's salary for not meeting goals or targets. It is important to adhere to these laws to avoid legal repercussions. Here are the key points to consider:
1. Legal Prohibition: As per the Payment of Wages Act, 1936, employers are generally not allowed to make any deductions from an employee's salary for reasons other than those permitted by the law.
2. Exceptions: Deductions can be made only in specific cases such as fines for misconduct, absence from duty, damage to property, etc., as outlined in the Act.
3. Alternative Approaches: Instead of reducing or holding the salary, consider the following alternatives to encourage performance improvement:
- Implement performance improvement plans (PIPs) to help underperforming employees.
- Provide additional training and support to help employees meet their goals.
- Offer incentives or rewards for achieving targets to motivate employees.
4. Communication: Clearly communicate performance expectations, KRA's, and consequences for not meeting them to ensure transparency and accountability.
5. Documentation: Maintain detailed records of performance discussions, warnings, and improvement plans to support any future actions if necessary.
6. Legal Consultation: If unsure about the legal implications, seek advice from legal experts or consult with HR professionals well-versed in Indian labor laws.
Remember, it is crucial to handle performance issues sensitively and in compliance with the law to maintain a positive work environment and foster employee engagement.
From India, Gurugram
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In India, labor laws strictly regulate the reduction or holding of an employee's salary for not meeting goals or targets. It is important to adhere to these laws to avoid legal repercussions. Here are the key points to consider:
1. Legal Prohibition: As per the Payment of Wages Act, 1936, employers are generally not allowed to make any deductions from an employee's salary for reasons other than those permitted by the law.
2. Exceptions: Deductions can be made only in specific cases such as fines for misconduct, absence from duty, damage to property, etc., as outlined in the Act.
3. Alternative Approaches: Instead of reducing or holding the salary, consider the following alternatives to encourage performance improvement:
- Implement performance improvement plans (PIPs) to help underperforming employees.
- Provide additional training and support to help employees meet their goals.
- Offer incentives or rewards for achieving targets to motivate employees.
4. Communication: Clearly communicate performance expectations, KRA's, and consequences for not meeting them to ensure transparency and accountability.
5. Documentation: Maintain detailed records of performance discussions, warnings, and improvement plans to support any future actions if necessary.
6. Legal Consultation: If unsure about the legal implications, seek advice from legal experts or consult with HR professionals well-versed in Indian labor laws.
Remember, it is crucial to handle performance issues sensitively and in compliance with the law to maintain a positive work environment and foster employee engagement.
From India, Gurugram
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